Berkshire Hathaway Reports Lower Q3 Operating Earnings, $9.6 Billion in Share Buybacks

Berkshire Hathaway reported a nearly 6% decline in third-quarter operating earnings on Saturday, November 7, even as it accelerated share repurchases to approximately $9.6 billion. The Omaha-based conglomerate earned $12.71 billion from its operating businesses in the three months ended September 30, 2026, compared with $13.49 billion in the same period last year.

The jump in buybacks came as insurance profits weakened, particularly at auto insurer GEICO. Elsewhere in Berkshire’s portfolio, earnings improved at BNSF Railway, its energy operations and the manufacturing, service and retailing businesses. Those gains were not enough to offset the decline from insurance.

Berkshire’s net income fell to $22.11 billion from $30.80 billion a year earlier. That larger decline partly reflected a drop in after-tax investment gains to $9.41 billion from $17.31 billion. Changes in the market value of shares Berkshire still owns can flow through reported net income, so the company cautions against treating that figure as a straightforward measure of how its operating businesses performed.

Insurance Weakness Drives the Earnings Decline

Berkshire’s third-quarter report shows that after-tax insurance underwriting earnings fell 42.9% to $1.35 billion from $2.37 billion. Insurance investment income slipped 14.1% to $2.73 billion from $3.18 billion. Together, those two businesses produced roughly $1.46 billion less after-tax profit than a year ago, more than the $780 million decline in Berkshire’s overall operating earnings.

GEICO accounted for a large part of the underwriting shortfall. Its pretax underwriting profit dropped to $982 million from $1.77 billion, despite a 1.3% increase in premiums earned. Insurance losses and related claims-adjustment expenses rose 8.5%, outpacing premium growth and putting pressure on margins.

The auto insurer’s loss ratio reached 76.6%, up from 71.5% in the third quarter of 2025. Berkshire attributed the deterioration to more frequent claims, higher average claim costs and lower average premiums per policy. The figures show the challenge for GEICO: adding policies does not necessarily improve underwriting results when the cost of covering them rises faster than premium revenue.

GEICO’s underwriting expenses also increased 17% for the quarter. Berkshire said higher commissions and advertising expenses helped push up its expense ratio over the first nine months of the year. For the third quarter, premiums written were slightly lower than a year earlier even though policies in force continued to grow.

Other parts of Berkshire’s insurance operation also earned less from underwriting. Pretax profit at Berkshire Hathaway Primary Group dropped to $119 million from $506 million, and Berkshire Hathaway Reinsurance Group declined to $582 million from $884 million. The company reported no significant catastrophe losses in the first nine months of 2026, compared with approximately $850 million of after-tax losses from major events in the corresponding 2025 period. Weaker underwriting therefore cannot be explained simply by an unusually large catastrophe charge this year.

Lower interest rates added another strain. Berkshire said reduced interest income was responsible for the decline in insurance investment earnings, an important contributor to profits given the group’s large holdings of cash and short-term securities.

Berkshire Steps Up Stock Repurchases

Berkshire bought back approximately $9.6 billion of its own shares between July and September, about twice the $4.8 billion it repurchased during the first six months of 2026. The third-quarter buying brought the total for the first nine months to $14.4 billion. Its filing lists purchases of both Class A and Class B stock in each month of the quarter, rather than a single large purchase on one date.

The pace is notable because Berkshire does not operate a fixed repurchase schedule. Under its policy, Chief Executive Greg Abel may authorize purchases after consulting the board chairman when he believes the shares trade below a conservative estimate of intrinsic value. The program has no stated maximum amount or expiration date, and Berkshire is not obligated to spend a particular sum.

That discretion matters when interpreting the buyback total. Repurchases can reduce shares outstanding and increase the proportionate ownership of remaining investors, but the benefit depends on the price paid. The $9.6 billion figure indicates how much Berkshire spent in the quarter, not a commitment to continue buying at the same rate.

Berkshire still has considerable financial flexibility. Its insurance and other businesses held $352.3 billion in cash, cash equivalents and U.S. Treasury bills at September 30, after accounting for payables tied to September securities purchases that settled in October. Berkshire’s policy prohibits repurchases if they would push consolidated cash, cash equivalents and Treasury bill holdings below $30 billion.

The balance sheet also reflects acquisitions made earlier in the year. Berkshire completed its $6.8 billion cash acquisition of homebuilder Taylor Morrison in July, after purchasing OxyChem for approximately $9.4 billion in January. Those outlays and the repurchases show that Berkshire has been deploying capital through more than one channel, though its remaining liquidity is still exceptionally large.

Railroad, Energy and Industrial Profits Offer Support

BNSF Railway generated $1.73 billion of after-tax earnings in the quarter, up 19.3% from $1.45 billion. Berkshire cited higher shipping volumes and operating efficiencies, which helped the railroad absorb higher costs. Its fuel expense alone rose 60.6% from a year earlier, reflecting higher prices and traffic.

Berkshire Hathaway Energy earned $1.61 billion after tax, an increase of 8.3% from $1.49 billion. Stronger results from U.S. utilities and natural gas pipelines outweighed weaker contributions from some other energy and real estate brokerage activities. The gains helped counter the insurance decline without reversing it.

Manufacturing, service and retailing earnings rose 11.8% to $4.04 billion from $3.62 billion, driven chiefly by industrial products and service businesses. The spread between those improvements and insurance weakness is an important feature of the quarter: Berkshire’s operating-earnings decline was not shared equally across its subsidiaries.

Revenue increased to $105.65 billion from $94.97 billion a year earlier. Higher sales did not translate into higher total operating earnings because the mix of results changed, especially within insurance. Berkshire also recorded a $343 million after-tax foreign-exchange loss on non-U.S.-dollar borrowings, compared with a $331 million gain in the year-earlier quarter, contributing to the decline in its other earnings category.

For the first nine months of 2026, operating earnings remained higher than a year earlier, rising to $37.03 billion from $34.29 billion. Berkshire nevertheless warned that changes in trade policy, tariffs, geopolitical conditions and customer demand could affect future operating results, and said it could not reliably predict the ultimate impact of those developments on its businesses.